June 16 Quizzes

Question 1

What is the order tax legislation passes through the U.S. legislative bodies? 3

Answer 1

1 house

2 senate

3 house-senate joint conference committee

Question 2

A decedent’s gross estate generally includes all property in which the decedent had…

Answer 2

An ownership interest at time of death

Question 3

A decedent’s gross estate generally includes all property in which the decedent had an ownership interest at time of death and anything the decedent had power to…

Answer 3

Revoke/terminate

Question 4

Trusts and estates may have…

Answer 4

NOL deductions

Question 5

Trusts and estates may have NOL that can be…3

Answer 5

1 carried back

2 carried forward

3 used as a deduction

Question 6

For the year in which a trust or estate terminates, any remaining unused NOL passes through to the…

Answer 6

Beneficiaries who succeed the assets of the estate or trust

Question 7

If the seller is not a merchant, when does risk of loss pass to the buyer?

Answer 7

On tender of delivery

Question 8

Under a notice-type statute, a subsequent purchaser, whether he or she records or not…2

Answer 8

1 Prevails over previous purchaser

2 who did not record before subsequent purchase

Question 9

A buyer purchased real property from the seller and received a warranty deed with full covenants. Recordation of this deed is irrelevant if the subsequent party claiming superior title had…

Answer 9

Actual notice of the unrecorded deed

Question 10

What 2 itemized deductions are added back to taxable income to arrive at AMT income before AMT exemption?

Answer 10

1 state and local income taxes

2 Miscellaneous deductions

Question 11

An accuracy related penalty applies to the portion of tax underpayment attributable to any substantial understatement of income tax and…

Answer 11

Negligence/disregard for tax rules and regulations

Question 12

In a nonliquidating distribution a partner…2 (losses and gains treatment?)

Answer 12

1 does not recognize loss

2 only recognizes gain to extent money received exceeds basis

Question 13

In a liquidating distribution, how is land treated?

Answer 13

Land absorbs Reed’s basis in the partnership after adjusting for
Receipt of cash

Question 14

A cash basis tax payer who died in 2014 was entitled to receive a $10,000 accounting fee that had not been collected before date of death. The $10,000 should appear in…

Answer 14

Both fiduciary income tax return and estate tax return

Question 15

In a general partnership, all general partners…

Answer 15

Have a right to participate in management

Question 16

Failing to keep books of account or records will…

Answer 16

Bar discharge of all debts

Question 17

In terms of social security law, a self-employed person must contribute an annual amount that is…

Answer 17

Equal to combined contributions of employee and employer

Question 18

A general clause in a deed would…

Answer 18

Have least significance in deciding ownership

Question 19

In calculating itemized deductions for 2014, what 2 items should be included?

Answer 19

1 taxes withheld in 2014

2 tax deficiency paid in 2014

Question 20

An accrual basis tax payer, what would they include in rent revenue?

Answer 20

Nonrefundable rent deposits

Question 21

A married participant in a pension plan, how many deductions are allowed? Why?

Answer 21

Only the wife can deduct (because doesn’t participate)

Question 22

If an art project with a purchase price of $600 and FMV of $900 is donated, what is the deduction?

Answer 22

$300 = 900-600

Question 23

What is the calculation for the foreign tax credit limitation?

Answer 23

Foreign tax credit limitation =

(Foreign TI/Worldwide TI) X US tax

Question 24

When computing foreign tax credit, separate calculations are made using…2

Answer 24

1 Other foreign source taxable income

2 foreign Nonbusiness related interest earned

Question 25

What is the classification of Land operated as a parking lot and a shed on the parking lot?

Answer 25

Both are section 1231 assets

Question 26

If a partner sells his partnership interest to an outsider for $68,000 cash and is relieved of a $3,000 liability, what is the total amount realized by the partner?

Answer 26

$71,000

Question 27

Alternative minimum taxable income before the adjusted current earnings (ACE) adjustment includes an adjustment for…

Answer 27

Tax exempt interest taking on private activity bonds

Question 28

If there is taxable income of $500,000 and income tax of $100,000, what is the maximum amount of accumulated taxable income that may be subject to accumulated earnings credit?

Answer 28

$150,000 = $500,000-$100,000-$250,000

Question 29

When Adam opens a joint account with his son’s friend with $70,000 deposited into it. There is a gift when the son’s friend…

Answer 29

Withdraws money from the account for his own benefit

Question 30

National Environmental Policy Act enforcement is primarily accomplished by…

Answer 30

Litigation of persons who challenge government decisions

Question 31

An oral agreement that would be binding without consideration would be…

Answer 31

An agreement that modifies an existing sales contract

Question 32

A subsequent bonafide purchaser would take the property over…

Answer 32

A previous mortgage holder who fails to record

Question 33

A bank penalty, what is its tax treatment?

Answer 33

Can be deducted from gross income in arriving at AGI

Question 34

In computing PHC tax consent dividends that are not paid are…

Answer 34

Deductible

Question 35

In a recapitalization, in which stock is exchanged for stock and bonds, there would be a recognized gain for…

2) why?

Answer 35

Bonds

2) bonds are considered boot